Vendor lock-in is a commonly heard and debated phrase in the telecom industry globally. It refers to a state of a telco’s reliance on a single or a few gear suppliers. The situation might harbor big risks and challenges to a telco for its operations and services. Here in this article, we go in depth to learn what vendor lock-in is, its risks, benefits, and how telcos can avoid it.
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What is vendor lock-in in the telecom industry?
Vendor lock-in is a scenario in which a certain company becomes heavily reliant on a particular company for infrastructure, installation, repair and maintenance, operation, etc. So, when the scenario takes place, an operator finds it incredibly difficult to switch to another gear vendor in terms of cost, physical and technical matters, and so forth.
The situation is an undesirable one in the telecommunications industry, as it can affect the operator’s autonomy. But also, this is one of the issues we notice from time to time.
What leads to vendor lock-in in telecom?
Different situations lead to vendor lock-in in the telecommunications industry. This could be when a telecom operator strikes long-term contracts with a single vendor. Or when a company only uses software, billing, and other core network services of a single supplier.
That is to say, when a telecom company buys equipment, software, and billing, and creates interoperability with the vendor’s ecosystem, lock-in ensues. As a result, a telco can’t easily escape the situation. Because it may have to mobilize huge resources or may even need to uproot the system in an extreme case.
Example of vendor lock-in
A key reason vendor lock-in happens is that there is a limited number of telecoms infra vendors, such as Huawei, Nokia, and Ericsson. They are responsible for supplying 4G, 5G equipment, including base stations, radio, and anything that forms the core radio network and their operation. Check out: Types of 5G network
Besides these, these companies also provide billing, CRM, network management, etc., which are referred to as proprietary telecom software. In Western countries, many have only a few vendors to maintain undersea cables, which also contributes to the vendor lock-in situation.
What are the risks?
Vendor lock-in can pose some risks, such as:
- High cost in switching: After years of dependency on one company’s network infrastructure, it may become too costly and bothersome to switch to another gear supplier.
- Delay in adopting newer technologies: If a company is tied to one supplier’s gears for a long time, chances are that it may find it difficult to bring in newer tech and innovations. For e.g., it may take time to launch 5G and 6G as they require advanced infrastructure.
- Security challenges: Less substantiated, but relying too much on one company may involve security risks for an operator. This could potentially leave user data vulnerable and even put the company at risk from cybersecurity issues.
There are advantages too
Vendor lock-in has some advantages, too. These are:
- Consistency and reliability: With one supplier’s vendor lock-in, an operator shall be very familiar with every hardware and software, and operation. It gives consistency and reliability to the operator for a long time.
- Less expensive: When there’s a vendor lock-in state, it’s likely that the supplier and the telco have a long-term contract. This often includes long-term benefits and incentives for the telco. But also, infrastructure procurement, installation, and its repair and maintenance are cheap. It’s beneficial to the telco in the long run.
- Easier repair and maintenance: When an operator uses one supplier’s gears, it becomes easier for the company to perform regular repair and maintenance. This is because technicians become familiar with the technical aspects of the operations of service.
- Better integration: Thanks to one supplier’s gears, integration between software and hardware becomes seamless and efficient. Extra effort and spending are often avoided, saving resources for the telco.
Also: T-Mobile WiFi Calling, requirements, set up on Android, iPhone, tariff
How can telcos reduce vendor lock-in?
Telcos can adopt measures below to reduce the possibilities of a vendor lock-in state:
- Prefer multiple vendor networks
- Sign short-term contracts only
- Adopt technologies like Open RAN
Conclusion
Vendor lock-in is not entirely wrong and evil. But in the long run, it may dampen a telco’s desire for change and need to bring in newer technologies. Also, switching to a different vendor becomes difficult. That’s why telcos try to avoid this situation.
Preferring Open RAN and choosing multiple vendor networks are important steps to avoid vendor lock-in in the future.